The Japanese way of innovation

Long-standing Japanese companies have remained a perennial success, thanks to strategic innovations.

We are now seeing traditional [Japanese] companies take new, sometimes surprising directions under leadership from the younger generation.

These days, media coverage of corporate culture tends to focus on tech companies such as Google, Facebook and Netflix, but in the case of Japan, manufacturing is still the bedrock of the economy. Commitment to quality and a strong work ethic propelled Japan to economic success in the decades following World War II.

This culminated in the boom period of the so-called “bubble” years in the 1980s, when Japan emerged as the world’s second largest economy after the United States. The dramatic rise ended abruptly, however, with the bursting of the economic bubble in the early 1990s. Since then, Japan’s firms have been redefining business practices and working to establish themselves in the ever-changing global economy.

“After the bubble burst, other external factors created more pressure for Japanese firms. Globalisation became stronger. China became a major player in manufacturing, being much cheaper than Japan, and consumers became more diverse and wanted a variety of stylish products. The classic manufacturing strategies did not work any more. It was not enough to just produce good products and sell them,” says Parissa Haghirian, a professor of international management at Sophia University in Tokyo.

She notes that one factor has stayed constant – Japan’s commitment to producing high-quality products. “Japanese companies are always the best in operation and manufacturing processes. They invented particular manufacturing systems that are now a worldwide standard. Process orientation and a love for detail are the base of this strength,” says Haghirian.

A strategic change in direction

David Blecken is an executive editor for Campaign, a global publication covering the business of branding and marketing. “We are now seeing these traditional companies take new, sometimes surprising directions under leadership from the younger generation, but these changes are not random – even though the products they produce may change, they are usually linked in some way to the company’s original foundation,” he says.

Against a background of economic change, one example of a traditional Japanese firm that has been adapting and thriving is Nitto Denko Corporation (Nitto), founded in 1918. While not exactly a global household name, the company draws on nearly a century of manufacturing success and now offers 13,500 products in more than 70 global industries. Nitto has built on its successful history while actively expanding in the fields of environment, new energy and life science – collectively referred to as “Green, Clean and Fine” by the firm.

“While it is difficult to sum up the reasons for our success in just a few words,” said chief executive Hideo Takasaki, “I think at the core is the fact that Nitto has been able to grow by viewing change as a chance for offering new value and for winning the trust of our customers.”

Leonard Le is a senior analyst with the Tokyo office of UltraSuperNew, a creative agency. When it comes to “Japanese innovation”, Le points out that large-scale breakthroughs in manufacturing technology are not the whole picture. “The other type of Japanese innovation is more of what I see here on the ground – under-the-radar, gradual evolutions that get overlooked by bigger, flashier technological upheavals coming out from other parts of the world. Just because the change is small or gradual doesn't make it any less an innovation,” he says.

Locally rooted, globally minded

Nitto’s products are a good example of the type of innovation that Le mentions. The firm started off producing electrical insulation tape but today its products can be found at the cutting edge of technology in myriad industries. Some examples of these include polarising film and transparent conductive film used in smartphones, as well as functional materials used in automobiles. In the medical field, Nitto has been developing pharmaceutical products such as nucleic acid medicines. An expanding market, nucleic acid medicines can be synthesised and have the potential to help cure diseases that were hitherto untreatable.

Standing on the cusp of a new century in business, Nitto has recently introduced “Innovation for Customers” as its new corporate slogan. “As represented by this concept, we want to offer innovation in the marketplace and to our customers. Moreover, we want to spark innovation in our customers, too,” says Takasaki.

Firms like Nitto will meet new challenges as they continue to expand their global footprint, as Blecken points out. “The biggest challenge for many Japanese companies is thinking as global rather than Japanese entities. Although they recognise that growth is more likely to come from overseas markets than the domestic one, they still tend to start out with a domestic focus and adapt it to be ‘global’ later. They would be better off thinking in terms of international markets first,” says Blecken.

Exporting Japanese innovation

Nitto is one firm striving to put an international spin on Japanese innovative excellence as it looks ahead to its corporate centenary in 2018 and beyond. Jun Yamashita, director of the Global Corporate Strategy Management Division, says, “We’ve continually worked for and with our customers, exceeding their expectations with our products and services: ‘That’s exactly what we wanted!’”

Mr Takasaki stresses that Nitto will continue to turn change into opportunity, pushing to be an innovative firm that adds value and comfort to the lives of its customers around the world.

Words by Louise George Kittaka

contributed from

This article was first published as an advertisement feature on bbc.com and was created by BBC StoryWorks,BBC Advertising’s commercial content team, on behalf of Nitto Denko Corporation.

Nitto is the Title Sponsor for the ATP Finals in London

Nitto is a leading diversified materials manufacturer from Japan that uses technologies it has cultivated during its 100-year history to develop innovative businesses around the world. Based on its core technologies, Nitto provides more than 13,500 diversified materials in more than 70 industries, such as electronics, transportation, infrastructure, environment, and life science. Nitto is proud to be the title sponsor for the Nitto ATP Finals held in London. Nitto is excited to support an event that shares its passion for taking on challenges.